Is Your Home Loan Rate Too High?

CANSTAR advises that even 5 year fixed rates terms can now be found at under 4 percent.

Thanks to the May cut in official cash rate, research and comparison site canstar.com.au advises that borrowers with some equity can now potentially lock in a home loan interst rate of less than 4 percent across all loan terms up to and including 5 year fixed.

“The cash rate is at a historic low and this is fantastic news for home owners wanting to refinance their mortgage,” said CANSTAR Group Manager, Research & Ratings, Mitchell Watson.

“For the first time our database of more than 1,000 home loans is showing advertised interest rates of less than four percent across all loan terms, including 5 year fixed. Prior to the most recent rate cut the lowest 5 year fixed home loan advertised rate on our database was 4.34 percent; it’s now 3.99 percent for owner-occupiers.”

Current highest, lowest and average advertised home loan rates

Table: Residential Home Loan Market – Snapshot of the current market (3/6/2016)

Standard Variable

Package Variable

1 Year Fixed

3 Year Fixed

4 Year Fixed

5 Year Fixed

Average

4.64%

4.35%

4.35%

4.31%

4.66%

4.70%

Min

3.59%

3.64%

3.50%

3.74%

3.99%

3.99%

Max

5.84%

5.10%

5.34%

5.24%

5.59%

5.59%

Source: www.canstar.com.au, the search results do not include all home loan providers, and may not include all features relevant to you. Advertised rates of products on CANSTAR database

Table: Investment Home Loan Market – Snapshot of the current market (3/6/2016)

Standard Variable

Package Variable

1 Year Fixed

3 Year Fixed

4 Year Fixed

5 Year Fixed

Average

4.86%

4.63%

4.55%

4.53%

4.84%

4.88%

Min

3.84%

3.95%

3.59%

3.89%

4.39%

4.49%

Max

6.03%

5.37%

5.34%

5.34%

5.69%

5.69%

Source: www.canstar.com.au, the search results do not include all home loan providers, and may not include all features relevant to you. Advertised rates of products on CANSTAR database

“Investors aren’t quite as lucky, the minimum and average interest rates on offer are higher than for owner-occupiers. Nevertheless there is significant variance between rates on offer – definitely shop around,” said Mr Watson.

CANSTAR provides Australia’s interactive online research service in consumer and business finance. Founded in 1992, CANSTAR Pty Limited is Australia’s researcher of retail finance information for over 250 institutions such as Banks, Building Societies, Credit Unions, Finance Companies, Brokers, Mortgage Originators, Life Companies and finance related Internet Portals. CANSTAR customers use the extensive database for competitor analysis as well as a means of disseminating their product range. CANSTAR also distributes this information to print and electronic media for publication and to Agents, Accountants, Brokers and Internet Portals for use in advising their clients.

What are the CANSTAR star ratings?

CANSTAR researches, compares and rates the suite of banking and insurance products listed below. Results are freely available to consumers who use the star ratings as a guide to product excellence. The use of similar star ratings logos also builds consumer recognition of quality products across all categories. Please access the CANSTAR website at www.canstar.com.au if you would like to view the latest star ratings reports of interest.

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To the extent that the information in this report constitutes general advice, this advice has been prepared by Canstar Research Pty Ltd A.C.N. 114 422 909 AFSL and ACL 437917 (“Canstar”). The information has been prepared without taking into account your individual investment objectives, financial circumstances or needs. Before you decide whether or not to acquire a particular financial product you should assess whether it is appropriate for you in the light of your own personal circumstances, having regard to your own objectives, financial situation and needs. You may wish to obtain financial advice from a suitably qualified adviser before making any decision to acquire a financial product. Canstar provides information about credit products. It is not a credit provider and in giving you information it is not making any suggestion or recommendation to you about a particular credit product. Please refer to Canstar’s FSG for more information.

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This advice is general and has not taken into account your objectives, financial situation or needs. Consider whether this advice is right for you. Consider the product disclosure statement before making a purchase decision. Canstar provides an information service. It is not a credit provider, and in giving you information about credit products Canstar is not making any suggestion or recommendation to you about a particular credit product. Statistics referenced on this page have been verified by Canstar Research. Research provided by Canstar Research AFSL and Australian Credit Licence No. 437917.